Bell Pottinger, one of the City's leading PR firm, whose former clients include the Rajapaksa government has been expelled from its trade association after an investigation into the firm's secret campaign to stir up racial tensions in South Africa found it to be the worst breach of ethics in the association's history.

The bank, which previously enlisted Bell Pottinger in London for short-term media engagement campaigns, confirmed that it has stopped working with the firm.

The PRCA said the Bell Pottinger campaign was "likely to inflame racial discord in South Africa".

Banking giant HSBC, Clydesdale Bank, TalkTalk and construction company Carillion are the latest companies to sever ties with the British PR firm in light of devastating findings into its account for the Gupta family, according to The Guardian UK.

It is understood to have given its 27 per cent Bell Pottinger stake to Bell Pottinger for nothing in a scramble to distance itself from the firm. Their departure brings the number of clients to have left the PR agency in the wake of the scandal to seven.

The Bell Pottinger spokesman added that the firm would implement "strong measures to scrutinise work and build strong best practice culture".

The Guptas have been accused of benefiting financially from their close links to Jacob Zuma, the South African president.

At the time Henderson, who resigned on Sunday, also fired the director running the campaign, Victoria Geoghegan, and suspended two other employees.

Bell Pottinger's second largest shareholder Chime - co-owned by a United States investment firm Providence Equity Partners and Sir Martin Sorrell's WPP Group - and is also reported to have walked away from the firm and abandoned a plan to sell its 27 percent stake, according to the BBC.

In a two-page document, the law firm concluded that Bell Pottinger's SA campaign included material meant to divide South Africans. "You can try and rescue it but it won't be very successful". The firm said earlier that it accepted there were "lessons to be learned" and that it would abide by the PRCA code of ethical conduct on a voluntary basis. "We don't comment on specific supplier relationships", said a spokeswoman, who refused to elaborate further.

Hugh Taggart, a partner who heads up the company's recently created Engage division, is expected to be appointed, although Bell Pottinger declined to comment on the move.

Chime, co-owned by U.S. investment firm Providence Equity Partners and Sir Martin Sorrell's WPP group, gave up trying to sell its 27 per cent holding and is understood to have given the stake to the company's board several weeks ago as the scandal reached boiling point.

Hain wants to know whether any United Kingdom government staff were aware of the nature of the contract between Gupta-owned Oakbay and Bell Pottinger.